Palworld Developer to Patch Game Amid Lawsuit from Nintendo and Pokémon Company

Palworld developer Pocketpair has revealed that recent updates to the game were necessitated by an ongoing patent lawsuit filed by Nintendo and The Pokémon Company. The game, which launched on Steam for $30 and was simultaneously available on Xbox and PC via Game Pass in early 2024, achieved unprecedented sales and player engagement. Despite the overwhelming success and profits, which Pocketpair's CEO Takuro Mizobe admitted were challenging to manage, the company quickly moved to expand the franchise by partnering with Sony to establish Palworld Entertainment. This new venture aims to broaden the Palworld IP, and the game was subsequently released on PS5.

The success of Palworld led to accusations of the game copying Pokémon designs, prompting legal action from Nintendo and The Pokémon Company. Instead of pursuing a copyright infringement lawsuit, they opted for a patent lawsuit, seeking 5 million yen (approximately $32,846) each in damages, plus additional late payment fees, and an injunction to halt Palworld's distribution.

The lawsuit centers around three patents related to capturing Pokémon in a virtual environment, which Pocketpair confirmed in November. Palworld features a similar mechanic where players throw Pal Spheres to capture monsters, reminiscent of the capture system in the 2022 Nintendo Switch game Pokémon Legends: Arceus.

In response to the legal challenges, Pocketpair released Patch v0.3.11 in November 2024, which altered the game's mechanics. Notably, the ability to summon Pals by throwing Pal Spheres was removed, replaced with a static summon beside the player. This change, along with others, was directly influenced by the lawsuit. Pocketpair justified these modifications by stating that without them, the gameplay experience would have deteriorated further.

Further adjustments were made with the release of Patch v0.5.5, which shifted the gliding mechanic from using Pals to requiring a glider in the player's inventory. Although Pals still offer passive gliding buffs, the core mechanic was altered as a compromise to avoid potential injunctions that could disrupt Palworld's development and sales.

Pocketpair expressed disappointment over these necessary changes but emphasized their importance in maintaining the game's development trajectory. The studio remains committed to contesting the lawsuit, arguing the invalidity of the patents in question.

In a statement, Pocketpair thanked fans for their support and apologized for the limited transparency during the ongoing litigation. They reaffirmed their dedication to delivering new content for Palworld and acknowledged the frustration felt by both the team and the players due to the required gameplay alterations.

At the Game Developers Conference (GDC) in March, John "Bucky" Buckley, communications director and publishing manager for Pocketpair, discussed the challenges faced by the studio, including accusations of using generative AI and copying Pokémon models, both of which have been debunked. Buckley also touched on the unexpected nature of the patent lawsuit from Nintendo, describing it as a "shock" to the team.